[klaatumail] Re: Beatles Remasters at Best Buy

  • From: Jaimie Vernon <bullseyecanada@xxxxxxxxxxx>
  • To: <klaatumail@xxxxxxxxxxxxx>
  • Date: Mon, 28 Sep 2009 12:56:50 -0400

At Date: Mon, 28 Sep 2009 11:52:01 David wrote:
> From: David_Bradley@xxxxxxxxxxxxxxx
> To: klaatumail@xxxxxxxxxxxxx
> > So all this crazy merchandising would fall
> > under the publishing royalties and therefore
> > go to MJ's heirs? 
> Well, the merchandising means a CD gets sold.  Each CD will be
> responsible for both a mechanical and a publishing royalty. 
> I believe the mechanical royalties get paid at the time of manufacture.
> I think the publishing royalties are only paid if it's sold, but I'm not
> positive on that aspect. Jaimie would know more.

Dave's mostly correct.

SONY/ATV & Michael Jackson's music company would each share the publishing 
royalty -- which, as stated, is only paid on units SOLD (any CDs that are 
returned to Capitol-EMI for refund by retailers are discounted). And that 
amount is believed to be 50% of $0.0825 for every ORIGINAL song on every album 
except those written by George Harrison and Ringo Starr or the four songs held 
back by Dick James when he originally sold the song catalog to Northern Songs 
in 1968 ("From Me To You", "Love Me Do", "P.S. I Love You" and "Ask Me Why"). 
Those songs required separate publishing deals and revenue shares that do NOT 
involve Michael Jackson or his estate.

Lennon and McCartney each receive 1/2 of 50% of the $0.0825 songwriting royalty 
for every ORIGINAL song they wrote for any of the 13 Beatles CD remasters. 
McCartney has indicated that his unresolved rift between him and Michael 
Jackson dealt with his request, on behalf of him and Lennon -- to get a bigger 
songwriting royalty. This indicates to those outside the Beatle camp that the 
deal Jackson original purchased may have been pulling MORE than the industry 
standard 50% leaving Lennon & McCartney less than their 50%. McCartney asked 
for a raise and Jackson refused. They never spoke to each other again after 

Regardless, BOTH  royalties are called the "mechanical" royalty -- one is the 
publishing share, one is the songwriting share. These royalty shares are also 
in place for any radio airplay that occurs around the world giving Jackson a 
piece of the Beatles everytime their songs get played -- or someone does a 
cover version.

To complicate matters, there are VIDEOS on each of these CD remasters which 
requires a synchronization royalty because the music is being married to 
visuals (i.e. film). So, the splits are nearly identical for that, though it's 
hard to say what the original publishing deal was that the songwriters signed 
in the 1960's.

THEN...there is the sales royalty based on the recordings themselves which has 
been a source of speculation for years. Epstein signed the Beatles to an 
absolutely criminal royalty rate with Parlophone in 1962 -- which included an 
equal share of the sale of every album to all four members of the band. The 
Beatles received a slightly larger pay increase upon renewing with Parlophone 
via Capitol Records in early 1967 -- and the term of the contract was extended 
from 5 years to 9 years...keeping the band tied to the label even after they'd 
split up -- finally elapsing in 1976. Lennon, Harrison and Starr all left 
Capitol at that time even after renewing the terms of their deal for BEATLES 
ONLY product for another 9 years [it is assumed the Beatles got another raise 
as Capitol was then allowed to release "Rock And Roll Music", "Hollywood Bowl" 
and "Rarities" as a concession]. 

That deal was renewed again every 5 years [giving us "Reel Music" and "20 
Greatest Hits"] and by 1992/1993 The Beatles and their revived corporate 
representatives, Apple Records, laid out a business plan that would have 
Beatles product re-launched, like Disney movies, intermittently over the next 
45-50 years. The "Anthologies" were the first salvo, followed by "1", The White 
Album Anniversary Remaster, "Yellow Submarine Songtrack", and "Let It Be: 
Naked" plus the most recent "Love" re-creation of classic tracks remixed.

There is no way of knowing how much money each of the Beatles is receiving for 
the CDs they sell. An EMI-Canada promotions manager for The Beatles "1" album 
told me years ago, he thinks it's 40% on the wholesale rate -- and that the 
Beatles do NOT allow any discounts of their product or promotional copies to be 
charged back to their account (which is standard practice...and why so many 
artists never make a dime from sales of their records). 

The Beatles also renegotiated their "controlled composition" clauses in their 
deal. Standard practice in the music industry since RCA Records invented the 
Long Play album in 1948 is that a label would not pay a royalty for any song 
exceeding 10 compositions on a record. If you notice, many of the Beatles early 
albums have 12 or 14 tracks. The Beatles would only get paid for 10 of those 
songs on each album. As smart business men, even at the beginning, they 
realized that the more original compositions they had on each record, the more 
money they'd make. But Parlophone insisted on cover tunes -- so the Beatles 
fought to have 2 to 4 cover tunes on each of the early albums as 'throw aways' 
that were not counted against their 10 controlled compositions. [Robert Palmer 
changed the industry standard in 1990 when he insisted on getting paid for 
every song because of the extended play time of CD releases. His album featured 
18 songs]

And make no mistake, the band makes money from EVERY single piece of 
merchandise that features their faces or the Beatles logo. This may look crass 
and greedy on the surface, but few people know that The Beatles never made a 
penny off Beatlemania between 1963 and 1966 because Brian Epstein gave the 
rights away for the band's merchandising during that 4 year period. All the 
money from Beatle wallpaper, curtains, lamps, mini-record players, combs, 
Beatle wigs, clothing accessories, et al went straight into the pockets of 
official licensees around the world. When Epstein died, the Beatles vowed to 
control all aspects of the group's intellectual and physical properties (where 
they could).

And this is why there is now a Beatles empire controlled by their 
representatives at Apple Records. 

PS - The Beatles "Table Top Box" does not have any CDs inside....it's a 
showpiece for people who've bought the discs to put their CDs INTO it that 
features two hard-cover books -- one with nothing but the album art in it.

Attention all humans. We are your photos. Free us.

Other related posts: